fyi i didnt report my etsy income last year (about 5k) and nothing happened. the irs has bigger fish to fry than small sellers. just sayin

I'm a tax preparer and see this situation ALL the time. You absolutely need to report that $4400 even without a 1099-K. The IRS is very clear that ALL income must be reported regardless of whether you receive tax documents. Since you're making handmade jewelry specifically to sell (not just decluttering personal items), this is definitely business income that goes on Schedule C. The silver lining is you can deduct business expenses like materials, tools, packaging, Etsy fees, payment processing fees, and even a portion of your home if you have a dedicated workspace. Don't wait for 1099-K forms that may never come - the reporting thresholds are much higher than your income level. File your taxes with the income included. It's much better to be proactive than to have the IRS find unreported income later through their increasingly sophisticated data matching systems. Keep detailed records going forward - receipts, bank statements, payment app summaries. This protects you and maximizes your deductions!

I completely understand your confusion - this is actually a really common question that trips people up! Everyone here is giving you correct advice. The key thing to remember is that a 401k loan is NOT a distribution or withdrawal. You're literally borrowing your own money from your account and paying it back with interest (which goes back to your account). Since it's not income, there's no taxable event and therefore no 1099-R form needed. TurboTax asks those 1099-R questions to everyone because they want to make sure people don't forget about any retirement distributions they might have received during the year. It's just a standard screening question, not an indication that you should have received one. As long as you're making your loan payments on schedule (which it sounds like you are), you're all good. The only time you'd need to worry about tax implications is if you defaulted on the loan - then the unpaid balance would become a taxable distribution. Your $12,000 loan for home repairs was a smart move to avoid high credit card interest rates, and you handled it correctly from a tax perspective. Don't let the software's persistent questioning make you second-guess yourself!

You've gotten excellent advice here! Just to add one more perspective - I work in HR and deal with 401k questions all the time. What you're experiencing is totally normal and Empower is 100% correct. The confusion often comes from people not realizing there's a big difference between a 401k LOAN and a 401k WITHDRAWAL/DISTRIBUTION. With a loan, you're essentially your own bank - the money never actually leaves the retirement system, you're just temporarily accessing it with a promise to pay it back with interest. Since no money is actually distributed out of the retirement system, there's no taxable event and therefore no 1099-R form. The IRS only cares about money that permanently leaves tax-advantaged accounts, not money that's temporarily borrowed and being repaid. TurboTax's persistent questioning is just their way of making sure people don't accidentally forget about any actual distributions they might have received. It's better for them to ask too many times than to let someone miss reporting actual taxable income. You made a smart financial decision using your 401k loan instead of credit cards for those home repairs. Keep making those payments on schedule and you'll have no tax issues whatsoever!

As someone who recently went through a similar inherited IRA situation, I can't stress enough how important it is to get this fixed immediately. Your advisor made a fundamental error that could have serious tax consequences. When my grandmother passed and left me her IRA, I initially worked with an advisor who almost made the same mistake. Fortunately, I caught it before the transfer was completed after doing my own research. Non-spouse beneficiaries simply cannot roll inherited IRAs into their own accounts - this is IRA inheritance 101. The fact that your account is now labeled as a "traditional IRA" instead of "inherited IRA" is a major red flag. This incorrect rollover could be treated by the IRS as a taxable distribution of the entire inherited amount, potentially creating a massive tax bill for you this year. Here's what worked for me when I had to correct a smaller error with my inherited account: - Contact both institutions immediately and use the phrase "administrative rollover error" - Reference Revenue Procedure 2016-47 which allows self-certification for rollover corrections - Get everything in writing, especially acknowledgment that this was advisor/institutional error - Request expedited processing since this affects your current tax year Don't let your advisor minimize this or claim it's "not a big deal." This is exactly the kind of mistake that can cost people tens of thousands in unexpected taxes. The good news is that it's fixable if you act quickly and persistently. Good luck - you've got this!

This is exactly the kind of situation that makes my blood boil - advisors who don't know basic inherited IRA rules but act like experts! Your advisor made a fundamental error that could cost you thousands in taxes. The silver lining is that this mistake is fixable, but you need to move fast. I went through something similar when my uncle's advisor tried to roll his inherited 401k into a regular IRA. Here's what saved me: First, call both financial institutions TODAY and specifically ask for their "retirement account corrections department" or "IRA specialist." Don't waste time with general customer service. Tell them you need to process a "Revenue Procedure 2016-47 correction for an administrative rollover error." Second, document everything. Get your advisor's mistake acknowledged in writing. If they try to downplay it or blame you, that's a huge red flag about their competence. Third, the correct account title should read something like "Andrew Pinnock as Beneficiary of [Father's Name] IRA" - make sure they get this exactly right when they fix it. You mentioned you were fine following the 10-year rule, which tells me you understand inherited IRA basics better than your advisor apparently does. Trust your instincts here and don't let them convince you this "isn't a big deal." Most institutions will cooperate once they realize the liability exposure from giving incorrect advice. If yours doesn't, escalate to their compliance department immediately.

You'll definitely want to pause any automatic contributions before starting the transfer process. Most brokerages can't seamlessly "take over" automatic investments during a transfer - you'll need to set up new automatic investment plans with your new brokerage once the transfer is complete. For dividend reinvestment, contact your current custodian to see if you can temporarily switch to cash dividends instead of automatic reinvestment during the transfer window. This prevents any complications with partial shares or reinvestments happening mid-transfer. Regarding transfer fees - many brokerages will actually reimburse transfer fees if you're bringing over a substantial amount like $27k. Call your new brokerage and ask if they have a "transfer fee reimbursement" program. Fidelity, Schwab, and Vanguard often waive these fees for accounts over $25k. Don't be afraid to negotiate - they want your business! Also, consider timing your transfer right after dividend payment dates to avoid any dividends getting caught in limbo during the transfer process. Most brokerages have transfer specialists who can walk you through the optimal timing for your specific holdings.

One important thing to keep in mind is that even if you successfully transfer the assets to your personal account, you'll still need to be prepared for the ongoing tax responsibilities. Since UGMA accounts often have investments that have been growing for years, you might be inheriting some significant unrealized gains. Make sure you get detailed records of the purchase dates and cost basis for every single holding before the transfer. Your custodian should be able to provide this information, but sometimes it can be incomplete, especially for older investments or if there have been stock splits or mergers over the years. Also, consider whether transferring everything at once is the best strategy. If you don't need access to all $27k immediately, you might want to transfer smaller amounts over time to better manage any potential tax implications and to test the process before moving your entire portfolio. Some brokerages are more efficient with partial transfers, and it gives you a chance to work out any kinks in the process before transferring everything.

Has anyone dealt with this for state returns specifically? My federal return was accepted but my state (California) was rejected, and I owe on both. Should I still pay the state amount even though the return was rejected?

Just want to add some additional peace of mind for anyone in this situation - the IRS has actually improved their e-file rejection process over the past few years. Most rejections happen within 24-48 hours of submission, so you'll know pretty quickly if there's an issue. If your return does get rejected, don't forget to check your email AND your tax software account for the rejection notice. Sometimes people miss the notification and think their return is still processing when it was actually rejected days ago. Also, keep records of your payment confirmation numbers when you pay online, even if your return is rejected. This will help you track that the payment was made on time if you ever need to dispute penalties later. The IRS and state systems are pretty good about matching payments to returns once the corrected filing is accepted.